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The Canada Emergency Business Account (CEBA) is an initiative of the Government of Canada.  The official Government website is

Making Sense of CEBA Refinancing Options

CEBA Refinancing Options
Reading Time: 5 minutes

On September 14, 2023, the Canadian government announced changes to the Canada Emergency Business Account (CEBA) loan repayment program. The announcement was long-awaited, as many felt the December 31, 2023 loan forgiveness deadline was set too soon despite the CEBA refinancing options. The repayment deadline for accessing partial loan forgiveness of up to 33 percent was extended, but not for long: the federal government’s announcement prolonged the partial repayment date until January 18, 2024.

While the outcome wasn’t what many had hoped, the changes do provide business owners with some clarity around the structure of the program. The Canadian government has made it clear that CEBA won’t be an industry-wide bailout. Instead, the new options for CEBA loan repayment provide evidence that refinancing the loan in time to access loan forgiveness options is the best outcome small business owners (who can’t repay the loan themselves) can look for.

Refinancing your CEBA loan? Talk to your Financial Institution First

CEBA Refinancing Options

For small businesses of any size, the first step towards picking a repayment option should be speaking with your financial institution.

Your financial institution (such as Meridian, Vancity, TD, RBC, BMO, or CIBC) will know you and your business needs best. CEBA loans were delivered through the banks in the first place – which means your financial institution will understand the loan (and your financial situation) best.

Additionally, part of the changes to the CEBA program in 2023 include an additional loan forgiveness extension for those who check in with their financial institution. If you’ve applied for a loan with your financial institution, the loan forgiveness deadline automatically resets to March 31, 2024 – no matter whether or not you’ve been approved or denied.

What happens if you can’t repay your CEBA loan?

If you don’t have the money to repay the loan by the forgiveness deadline (January 18, 2024), and you’ve applied through your financial institution and gotten the CEBA deadline extension of March 31, 2024, you still have a few options. Try our CEBA loan repayment calculator to find the best one for your business. This tool compares the cost and cash flow of each option, so you and your business can stay informed.

CEBA Refinancing Options: A 4-Step Guide

CEBA Refinancing Options from financial institution

Here are the CEBA refinancing options:

Step 1. Continue with CEBA loan

The CEBA loan was offered in a period of lower inflation than there is today. Five percent is a very good interest rate, given the market outlook in September of 2023. Not only is it better than the market rate, but businesses looking to refinance their loan (or having trouble refinancing it) will end up paying lenders higher amounts of interest to compensate for the risk.

Unfortunately, choosing this option does mean you can’t take advantage of loan forgiveness. This will be a major factor in repaying your loan since loan forgiveness —- up to 33% — will take a big chunk out of your principal to repay. To compensate for the extra principal, you’ll end up paying more over time, even with the lower rate. For this strategy to be viable, you’ll need to have consulted with alternative lenders or been deemed ‘high risk’ enough to get a fairly high rate.

Step 2. Refinance via your financial institution

Your financial institution should be the first place you go for CEBA refinancing, thanks to the recent provisions set out by the Government of Canada. Even if the financial institution you bank with (wherever you got your CEBA loan from) declines your loan, you still get an extended period free of interest and a longer time to get refinanced after speaking with your bank.

For those who do qualify, the interest rate for CEBA loans refinanced through a traditional institution is usually favourable (3-6% above prime). With the additional benefit of loan forgiveness, refinancing through a financial institution could be your best alternative.

Step 3. Refinance via an alternative lender

If you don’t (or expect you won’t) qualify for a bank loan, apply anyway: just the application will get you the benefits of the extended loan forgiveness deadline. If you get declined, however, there are still alternatives available. Other options, such as fintechs or small-business lenders, will charge a higher interest rate: but with the cost of up to 33% of the loan up for grabs before the forgiveness deadline, it might be worth the price.

Step 4. Repay without taking a loan

Finally, you could repay your CEBA loan with income generated by the business, by the sale of collateral, or by raising money from friends and family. Getting the non-forgivable portion repaid before the March 31, 2023 deadline is essential, as a large portion of what you’ll have to repay overall. Even a combination of personal assets, business cash, and borrowed capital could get you across the non-forgivable portion – saving you money later on.

Be realistic about your payments, interest rate, or timeline when applying for a loan. The loan forgiveness portion means that it can be more affordable to take a high-interest option early rather than forgo the forgiven portion of the loan. However, you still need to be realistic about how much you can afford on a monthly basis and the factors that can help you reduce the interest rate on the loan. Consider the collateral you have available and the cash flow you’ll expect to have.

Still want to learn more? We’re here to help – check out our blogs and other resources on repaying your CEBA loan.

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